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Six Sigma

Definition - What does Six Sigma mean?

Six Sigma is a business management technique originally formulated by Motorola USA in 1986. Six Sigma aims to improve the quality of process outputs by isolating and getting rid of the causes of defects, thus minimizing variability in manufacturing and business processes.

Six Sigma applies a group of quality management techniques and creates a special infrastructure of human resources within the organization (such as Black Belts or Orange Belts) who are professionals in these techniques. Each Six Sigma project implemented within an organization abides by a certain sequence of steps and has quantified financial goals, such as cost reduction or profit optimization.

Techopedia explains Six Sigma

The term Six Sigma came from expressions associated with industry and statistical representation of industrial processes.

Six Sigma is focused on process improvement. Anything customers see from a company are outputs of a set of business processes. In fact, it could be said that a Six Sigma company views poor results as symptoms of poorly designed processes that produce process errors. Six Sigma methodologies provide a quantitative understanding of the relationship between process outputs and process inputs. The basic formula is simple: The output of a process is a function of a set of the inputs of a process (Y = f(x's)). An extension of this formula is as follows:

Y = f(x1 , x2 ,... ,xk)

Where Y is the output and the Xs are the inputs - In other words, "Y is a function of the Xs."

The primary focus of Six Sigma is money. A company can create money in three ways: bottom-line growth (productivity), top-line growth (growth) and freeing up cash. Therefore, all Six Sigma projects should be linked to the organizational strategy and directed at hitting growth targets, cash targets and productivity targets.

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